The U.S. Department of Justice has launched an investigation into Polymarket, a cryptocurrency-based prediction market platform, over alleged violations of U.S. regulations concerning U.S. citizen participation.
Background and Investigation Causes
Polymarket facilitates markets where users can bet on event outcomes, including elections. In 2022, the platform settled with the CFTC by paying a $1.4 million fine and agreeing to restrict its services to non-U.S. users. Despite this, reports that U.S. citizens continue accessing the platform have prompted the DOJ to investigate.
Escalation and FBI Raid
Tensions escalated after an FBI raid at the home of Polymarket CEO Shayne Coplan in Manhattan. This raid came shortly after Polymarket correctly predicted Donald Trump’s victory in the 2024 presidential election, leading to suspicions that the investigation could be politically motivated.
Polymarket's Response
Polymarket called the DOJ’s actions politically driven, accusing the administration of targeting companies linked to political opponents. A spokesperson emphasized the platform’s role as a transparent, fee-free market that serves the public good globally.
The investigation into Polymarket has sparked significant debate within the crypto industry. The platform continues to defend its transparency and operational values while facing regulatory scrutiny.
